 Eurozone Membership and Foreign Direct InvestmentRandolph Bruno () and
Saul Estrin ()
A chapter in Comparative Economic Studies in Europe, 2021, pp 211-226 from Palgrave Macmillan Abstract: Abstract Our aim in this chapter is to estimate the effects of European Monetary Union (EMU) membership on foreign direct investment (FDI). Previous literature on the cross-border impact of a common currency have concentrated on international trade effects. Our analysis is based on the gravity model, which has been successfully applied to explain most forms of bilateral cross-border flows. We estimate a structural gravity model using data for 34 OECD countries between 1985 and 2013 for bilateral FDI. We use a variety of econometric techniques to ensure the robustness of our findings including stock as well as flow measures of FDI and addressing selection issues. Our estimates of the impact of EMU underlines the role of FDI as a channel for benefits from deep economic integration between countries. The effect of EMU membership on FDI is estimated to be significant and positive, at around 130%. Keywords: Foreign direct investment; Gravity model; European Monetary Union; F15; F21; F36 (search for similar items in EconPapers) There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it. Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:pal:stuchp:978-3-030-48295-4_11 Ordering information: This item can be ordered from DOI: 10.1007/978-3-030-48295-4_11 Access Statistics for this chapter More chapters in Studies in Economic Transition from Palgrave Macmillan |
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